Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.6, No.14, 2015 170 The Moderating Effect of an Audit Committee on the Relationship between Non-Audit Services and Corporate Performance Khaldoon Ahmad Al Daoud (Corresponding author) Department of Accounting, Faculty of Business, Amman Arab University, Amman- Jordan Dea’a Al-Deen Omar Al-Sraheen Department of Accounting, Faculty of Economics and Administrative Sciences, Al-Zaytoonah University of Jordan, Amman - Jordan Nimer Abd Alhamid Alslehat Department of Accounting, Faculty of Business, Amman Arab University, Amman- Jordan Abstract The corporate performance is very important issue in developing countries like Jordan. However, there is a lack of studies that investigated this issue in developing countries, particularly in Jordan. This paper investigated the effect of board diversity and non-audit services (NAS) on the corporate performance of Jordanian industrial firms listed on the Amman stock exchange. It also explored the moderating effect of the audit committee on the association between NAS and the performance of firm, which has not been fully investigated so far by other studies on Jordanian firms. In this study, performance was measured using (ROA) return on assets and (ROE) return on equity. This study covered 58 industry firms listed on the Amman Stock Exchange in 2011. The findings showed that NAS and board diversity were significantly related to corporate performance. The results also showed that an audit committee moderates the relationship between NAS and corporate performance for the two models (ROE and ROA). The findings of this study indicated that NAS negatively affected firm performance by confining the functions of an independence auditor, a situation that would lead ultimately to lower financial performance of firms. This study concludes that the existence of an audit committee in the firms contribute positively to improving their performance. Keywords: corporate performance, non-audit services, audit committee, Jordan, industrial firms 1. Introduction Effective and good corporate governance is a vital and crucial element for a company to remain competitive and strong (Al-Amarneh & Yaseen, 2014). Corporate governance structure plays a main role in macroeconomic stability and offers a suitable situation for growth. Hence, global organizations have a large concern for good governance and pay attention to this matter at the micro and macro levels. A good corporate governance system is critical at both the corporate and the country levels (Al- Haddad, Alzurqan & Al_Sufy, 2011). The literature of corporate governance indicates that non-audit services (NAS), board diversity and an audit committee are likely to be positively associated with the performance of firms. The related literature also affirms that the independence of auditors for audit and non-audit activities is related to the performance of firms, which in turn, influences firm value (Hay, Knechel, & Wong, 2006; Stanley, 2011; Martinez & de Jesus Moraes, 2014).